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St. Louis Compliance Workshop for Broker-Dealers and Investment Advisers – July 24, 2013


ACA Compliance Group St. Louis Skyline

ACA Compliance Group, Bryan Cave, ExamFX and Global Relay Present  St. Louis Compliance Workshop for Broker-Dealers and Investment Advisers – July 24, 2013

Wednesday July 24, 2013 1:00 p.m. – 4:00 p.m. Cocktail Reception Immediately Following

Location: Bryan Cave One Metropolitan Square 211 N. Broadway St. Louis, MO 63102-2750

RSVP By July 17, 2013

ACA may provide information about roundtable attendees (name, company name, provided address, phone, and email information) to our event co-sponsors. However, you may opt out of this information sharing if you prefer (see instructions following registration).

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When The General Powers Granted To A Trustee Conflict With A Specific Trust Provision


Almost invariably, settlors give their trustees broad powers regarding trust property.  Often these broad powers include the power to convey and encumber trust property and the power to loan trust property.  But, sometimes, the settlor also gives the trustee specific instructions with respect to specific trust property.  In Hamel v. Hamel, the Kansas Supreme Court interpreted a trust instrument that gave the trustee broad general powers, but also specific directions regarding a specific piece of real property, and examined the interplay between the two provisions.

Arthur L. Hamel’s trust instrument gave the trustee broad authorization to control and administer trust property, including “the power to do all acts that might legally be done by an individual in absolute ownership and control of the property” and provided the trustee with “the power to lend money to . . . any beneficiary

Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary


Time to get into the weeds on the scope of a trustee‘s powers.  There are basically two sources of power for a trustee – the trust instrument and state law.  Where those two intersect, overlap, conflict, or diverge is where you will likely find the bulk of fiduciary litigation about trustee powers.

Death, Taxes and Miles: Where do your frequent flyer miles go when you’re gone?

When someone passes away, usually their next of kin, agent or fiduciary will begin to compile a list of the decedent’s assets.  Rarely will such a list include the decedent’s frequent flyer miles.  However, depending upon how many miles have been accrued during the decedent’s life, frequent flyer miles can be worth hundreds, maybe even thousands, of dollars.  In such cases, heirs or beneficiaries of the decedent’s estate may wish to benefit from the value the decedent has amassed in frequent flyer miles.

Transferring Miles

Most airlines allow for mileage transfer among the living, but it is usually an expensive task to accomplish, often accompanied by fees and yearly limits.  The transferability of frequent flyer miles upon death is no more simple.  Susan Stellin, the author of a New York Times article entitled “The Afterlife of Your Frequent Flyer Miles,” stated “I asked six airlines if they allow transfers

Almost Final Isn’t Final: The Fact That Divorce Was Nearly Final Does Not Prevent Spouse From Inheriting in Illinois Case

The Illinois Appellate Court in In re Estate of Doman issued a ruling on October 11, 2012 that once more clarifies why it is important to have a Will and, depending on circumstances, potentially a revocable trust. (See our prior posts on Why Do I Need a Will? (Part 1 and Part 2) and Why Do I Need a Trust?)

Trial Court Proceedings:

In the Doman case, Sara and Mark Doman were in the home stretch of their divorce when Mark died on July 4, 2011. On June 10, the trial court had issued a written dissolution judgment and reserved ruling on the ancillary issues, with a status hearing set for July 11. Sara’s attorney called the court on July 5 to inform the trial court of Mark’s death and the trial court entered a docket entry that stated, “Cause set for 7/11/11 is

“Inherited IRA Rollover” is Not a True Rollover

Section 408(d)(3) of the Code specifically deals with when a distribution from an individual retirement plan to an individual does not need to be included in the gross income of the individual recipient but rather may be paid into another IRA for the benefit of such individual. This recontribution of an IRA distribution is referred to in this provision as a “Rollover Contribution” and must be completed within 60 days of the receipt of the distribution from the distributing IRA. Section 408(d)(3)(C), however, denies rollover treatment for inherited IRAs, and specifically states that any amount received by an individual from an IRA account inherited on the death of another individual cannot be contributed to another IRA for his or her benefit unless the individual was the surviving spouse of the decedent.


When Is More Than 35 Years Still Timely?

PLR 201228017 provides a good reminder of the requirements for disclaiming an interest in a trust that was created prior to January 1, 1977. This PLR involves a disclaimer by a beneficiary within 9 months of attaining age 18.

In order for a disclaimer of a pre January 1, 1977 transfer not to be considered a transfer subject to gift tax, the disclaimer must be “unequivocal, effective under prior law, and prior to accepting any benefits. In addition, the disclaimer must be timely. In order to be timely, Reg. § 25.2511-1(c)(2) provides that the refusal must have been made “within a reasonable time after knowledge of the existence of the transfer.”

After reciting these general rules applicable to pre-January 1977 transfers, the PLR then relied on the Regulations under § 2518 applicable to post December 31, 1976 transfers. In respect of the timeliness of the disclaimer, the PLR states that

What’s Yours is Ours?

What’s Yours is Ours?

November 5, 2012

Authored by: Kathy Sherby and Stephanie Moll

Estate of Alfred J. Richard v. Commissioner, T.C. Memo 2012-173 (6/20/2012), is an unusual case in which the government sought to include 140 shares of preferred stock in A.J. Richard & Sons, Inc. (the “Company”) in the gross estate of the decedent, Alfred Richard (“Alfred”).  The shares were initially reported on the estate tax return, but it was later determined that Alfred did not own the shares that passed through his predeceased wife’s will.  The government’s arguments in opposition to the estate’s amended Tax Court petition reducing the number of shares of preferred stock from the 740 shares reported on the estate tax return by the 140 shares in Mrs. Richard’s name at the time of Alfred’s death, were each resoundingly overruled by Judge Goeke.

Mrs. Richard had died in 1997 at a time when she owned 140 shares of preferred stock in the Company and Alfred owned 600 shares

Should A Testator Explain Why She Disinherited A Child?

November 1, 2012



Hell hath no fury like a disinherited child.  Or, if not fury, then at least an appetite for litigation.

Many estate planners recommend against total disinheritance and instead couple a token distribution with an in terrorem clause.  That way the disinherited child stands to lose something if he or she pursues estate litigation.  Of course, that doesn’t always work.  Especially if the risk is greatly outweighed by the potential reward – say giving up a sure $5,000 for a possible $1 million.

So, what else can a testator do to ensure that his or her intent to disinherit is upheld if there is litigation?

In In the Matter of the Probate of the Alleged Will of Joan Pennella, a recent case out of New Jersey, we see the value placed by a court on the testator’s own explanation of why she

Extension of Time to File Form 8939

In PLR 201231003, the taxpayer requested an extension of time to file the Form 8939 to make a timely election to apply the provisions of § 1022 of the Code to determine the basis of property acquired from a decedent who died in 2010, pursuant to § 301.9100-3.

Notice 2011-66 stated that an extension of time to file a Form 8939 could be sought and granted under four limited circumstance, one of which was that the taxpayer met the requirements for an extension under § 301.9100-3. That Regulation requires that the taxpayer acted reasonably and in good faith, defining such to include when the taxpayer “(v) Reasonably relied on a qualified tax professional, including a tax professional employed by the taxpayer, and the tax professional failed to make, or advise the taxpayer to make, the election.”